Financial Inclusion Research

In recent years as part of its re-engineering strategy Gallup Pakistan has started working in the field of Financial Inclusion. This includes survey and consultancy work in both Demand and Supply side Surveys for conventional (Banking, Insurance, Investment Instruments) as well as non-conventional Instruments such as Microfinance Institutions, Microfinance Banks and Mobile Money. Gallup has partnered with prestigious local as well as international institutions in undertaking these studies.

This project was undertaken with the aim to identify those population clusters that are most likely to take up microfinance loans, and thus greatly enhance the level of financial inclusion in Pakistan. This study has been led by Professor Daniel Read from the Behavioural Science Group at Warwick Business School, the leading behavioural science group in Europe.

3. 29% of the general public in Pakistan claims to have not heard the word ‘Islamic Banking’ at all.

According to a survey conducted by Gallup Pakistan, 29% Pakistanis claim to have heard and understood the meaning of the term ‘Islamic Banking’ whereas an equal proportion of Pakistanis claim to have not heard about Islamic Banking at all. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 4 for more details).

4. 77% of the general public in Pakistan claim to have heard the word ‘Interest’ and understood its meaning.

According to a survey conducted by Gallup Pakistan for the State Bank of Pakistan, 77% Pakistanis claim to have heard and understood the meaning of the term ‘Interest’ whereas only 4% said that they have never heard the word. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 4 for more details).

5. 33% of the general public in Pakistan has never heard the word ATM.

According to a survey conducted by Gallup Pakistan, 30% Pakistanis claim to have heard and understood the meaning of the term ‘ATM’ whereas 33% said that they have never heard the word. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

6. 51% Pakistanis believe that only people earning a regular salary can have a bank account.

According to a survey conducted by Gallup Pakistan for the State Bank of Pakistan, 51% Pakistanis believe it is true that only people earning a regular salary can have a bank account whereas 46% people state that it is false. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 4 for more details).

7. 16% of the general public in Pakistan owns and/or uses a bank account.

According to a survey conducted by Gallup Pakistan for the State Bank of Pakistan, 16% Pakistanis claim to own and/or use a bank account, including a traditional bank account as well as a mobile account. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 2 for more details).

8. 61% people in Punjab believe that it is possible to send money to another person via a cell phone whereas only 37% of the public in Baluchistan believes this to be true.

According to a survey conducted by Gallup Pakistan for the State Bank of Pakistan, 56% Pakistanis believe that it is possible to send money to another person with the help of a mobile phone whereas 24% Pakistanis categorically declare such a possibility as false. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

9. 31% of those Pakistanis who save money in a committee primarily participate in order to prepare for unexpected events/social events.

According to a survey conducted by Gallup Pakistan for State Bank of Pakistan, when asked the reasons for participating in a committee, 31% Pakistanis said that it was because of unexpected events/social events. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 4 for more details).

10. Majority Pakistanis (61%) prefer to keep their savings either at their home or at the homes of their relatives/friends; the second most popular method for saving money is through contributing to committees.

According to a survey conducted by Gallup Pakistan for State Bank of Pakistan, 61% Pakistanis have put most of their savings in their homes or at the homes of their relatives/friends in the past 12 months. Furthermore, 21% Pakistanis have put most of their savings in a committee whereas only 6% Pakistanis decided to put most of their savings in banks. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

11. 53% Pakistanis cite lack of information as the main reason for not opening a bank account.

According to a survey conducted by Gallup Pakistan, 53% Pakistanis who did not own an account cited lack of information regarding banks and banking procedures as the main reason behind not opening a bank account. These results are part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 3 for more details).

12. Dominant majority of Pakistanis (86%) agree that it is better to carry out monetary transactions on a face to face basis so as to be certain that the money has been received.

According to a survey conducted by Gallup Pakistan, 86% Pakistanis agreed with the following statement: ‘When paying for goods or services, it is better to do it face to face so as to be certain that the money has been received’. On the other hand, 14% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

13. Majority Pakistanis (69%) state that the best way to protect one’s savings is to invest them in real estate.

According to a survey conducted by Gallup Pakistan, 69% Pakistanis agreed with the following statement: ‘Savings are best protected when invested in property or land’. On the other hand, 31% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

According to a survey conducted by Gallup Pakistan, 55% Pakistanis agreed with the following statement: ‘Banks take advantage of poor people’. On the other hand, 45% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 4 for more details).

15. Dominant majority of Pakistanis (72%) believe they can live their life without having a bank account.

According to a survey conducted by Gallup Pakistan, 72% Pakistanis agreed with the following statement: ‘You can easily live your life without having a bank account’. On the other hand, 28% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

16. Dominant majority of Pakistanis (65%) believe that cellphone/mobile banking will not make banking more affordable.

According to a survey conducted by Gallup Pakistan, 65% Pakistanis agreed with the following statement: ‘Cell phone/mobile banking will not make banking more affordable to use’. On the other hand, 35% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

17. 67% of the general public in Pakistan agrees that making payments with mobile money agents is a useful innovation.

According to a survey conducted by Gallup Pakistan, 67% Pakistanis agreed to the statement: ‘Making payments with mobile money agents is a useful innovation’. On the other hand, 33% respondents disagreed with the statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

18. Dominant majority of Pakistanis (71%) cited a lack of need when asked for reasons behind not using mobile phones regularly.

According to a survey conducted by Gallup Pakistan, 71% Pakistanis, when asked why they do not use a mobile phone regularly, stated that it is because they did not need a mobile phone. 12% Pakistanis said that they did not know how to use the device whereas 10% said that the reason they didn’t use cell phones regularly is because they couldn’t afford them. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

19. Majority Pakistanis (59%) are often worried about the possibility of not having enough money in old age.

According to a survey conducted by Gallup Pakistan, 59% Pakistanis agreed with the following statement: ‘You are often worried that you won’t have enough money for old age’. On the other hand, 41% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

20. Dominant majority of Pakistanis (72%) are of the view that owing money to anyone is never a good idea.

According to a survey conducted by Gallup Pakistan, 72% Pakistanis agreed with the following statement: ‘Owing money to anyone is not good’. On the other hand, 28% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

21. Majority Pakistanis (68%) are content with what they already have and feel averse towards venturing into new and unknown things.

According to a survey conducted by Gallup Pakistan, 68% Pakistanis agreed with the following statement: ‘You believe that it is better to stick to what one has rather than to venture into the unknown’. On the other hand, 32% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

22. 39% of the general public in Pakistan does not have any understanding about insurance.

According to a survey conducted by Gallup Pakistan, 39% Pakistanis do not have any understanding at all about insurance. On the other hand, 58% respondents claimed to somewhat understand insurance whereas only 3% have a lot of understanding about insurance. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

According to a survey conducted by Gallup Pakistan, 59% Pakistanis agreed that having a bank account would bring advantages to them. On the other hand, 41% disagreed with the statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 4 for more details).

24. 3 in 4 Pakistanis believe that credit/ loan should be avoided as it is a source of tension and worries.

According to a survey conducted by Gallup Pakistan, 75% Pakistanis agreed with the following statement: ‘One should avoid credit/ loan because it is a source of tension and worries’. On the other hand, 25% disagreed with the statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 3 for more details).

According to a survey conducted by Gallup Pakistan, 64% Pakistanis are saving at the present. Results for other regions and countries show that in 2015, 32% adults in Asia reported saving money, 26% in Latin America, 61% in Singapore and 36% in Sri Lanka. Comparing Pakistan’s figures with those of other regions and countries shows that on average the proportion of people who report to save money is higher in Pakistan. However, the amount saved is proportionally smaller in nominal and relative terms. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public (please refer to page # 3 for more details).

Pakistan has one of the lowest financial inclusion figures in South Asia with only 16% of the population formally banked and 23% using formal financial services. These figures contrast significantly with the regional average of 46%. There are many reasons to believe there is a strong unmet demand for these financial services: more than half of the Pakistani population saves (but only 8% in formal financial institutions); one-third of the population borrows (but only 3% using formal credit products). The lack of engagement in formal financial institutions presents an exciting opportunity to understand what are the psychological and behavioural factors that currently obstruct consumers from using these services. These insights can also help inform us to design financial products that best fit the populations they are designed to serve.

This press release is part of a special series that aim to foster an empirical understanding of financial inclusion in Pakistan and hope to create a collaborative network of individuals working on the topic. This particular press release aims to determine the proportion of Pakistanis who believe in the use of prize bonds in Pakistan.

This press release is part of a special series that aims to foster an empirical understanding of financial inclusion in Pakistan and hopes to create a collaborative network of individuals working on the topic. This particular press release aims to assess what the population perceives as important risks to their household budget management.

29. 47% Pakistani women make important financial decisions in consultation with their husbands; 23% Pakistani men make important financial decisions in consultation with their wives.

According to a survey conducted by Gallup Pakistan, 47% Pakistani women claim to make important financial decisions in consultation with their husbands while only 23% Pakistani men make important financial decisions in consultation with their wives. These results are part of the nationwide Access to Finance Survey conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusivity of the Pakistani public (please see page # 4 for more details).

30. 39% Pakistanis cite lack of information about bank accounts and financial institutions as the primary reason for not saving money at a financial institution.

According to a survey conducted by Gallup Pakistan for State Bank of Pakistan, when asked the reasons for not saving money in banks and other financial institutions, 20% Pakistanis said that it was because they did not know enough about bank accounts while 19% Pakistanis said that they did not know enough about financial institutions. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

31. Majority Pakistanis (74%) agree that financial matters should always be discussed with elder members of the household.

According to a survey conducted by Gallup Pakistan, 74% Pakistanis agreed with the following statement: ‘Financial matters should always be discussed with the elder members of the household’. On the other hand, 26% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted for the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

32. Majority Pakistanis (65%) would rather deal with people they know rather than with banks when it comes to making financial decisions.

According to a survey conducted by Gallup Pakistan, 65% Pakistanis agreed with the following statement: ‘When it comes to financial decisions, you would rather deal with people you know than with a bank / financial institution / organization’. On the other hand, 35% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

33. Majority Pakistanis (58%) admit to not feeling in control of their financial affairs.

According to a survey conducted by Gallup Pakistan, 58% Pakistanis agreed with the following statement: ‘You often don’t feel in control of your finances/money matters’. On the other hand, 42% disagreed with this statement. These results are a part of the nationwide Access to Finance Study conducted by the State Bank of Pakistan in 2015 with the intent of determining the degree of financial inclusiveness of the Pakistani public.

34. Access and Trial: 16% Pakistanis have accessed a formal financial service in Pakistan; lack of need cited as the main reason for not using formal financial services. (InterMedia/ Gallup Pakistan)

According to the Financial Inclusion Insights (FII) Survey by InterMedia USA (www.finclusion.org) in Pakistan (fieldwork conducted by Gallup Pakistan), 16% Pakistanis have accessed a formal financial service in Pakistan; lack of need cited as the main reason for not using formal financial services.

According to the Financial Inclusion Insights (FII) Survey conducted in Pakistan by InterMedia USA (www.finclusion.org), with fieldwork conducted by Gallup Pakistan, in 2017, 10% of Pakistani adults are advanced users of financial services, using their registered accounts for activities beyond account management and person-to-person transfers. 81% of advanced users reported saving money via a variety of methods. Even though this indicates a low penetration of advanced usage, given the large population of Pakistan, the total users of advanced financial services amount to nearly 10 million people. 8 million people, moreover, say that they actively save. This represents a substantial market capitalize on and to design better products for.

The analysis presented in this report is based on: – The Tracker Survey: A nationally representative survey of 6,000 Pakistani adults, ages 15 and older, conducted from Nov. 7, 2013, to Jan. 3, 2014, on access and use of financial services, as well as barriers and potential for future use. Reported data: All percentages in this report are weighted to reflect national-level proportions. All bases (n=numbers) in this report are unweighted and represent the actual number of people interviewed in the survey. – The Consumer Focus Groups Study: A qualitative study with mobile money users and non-users conducted Feb. 17 to March 20, 2014. The study was designed to provide insights into why and how customers access mobile money; why non-users are not using mobile money services; barriers to and triggers for uptake and use of mobile money; participants’ financial behaviours and current pain points; and the potential for new digital services. – Customer and Agent Interview Study: A qualitative study was conducted Feb. 28 to March 21, 2014, consisting of interviews with mobile money agents and exit interviews with mobile money users to provide insights into over the-counter (OTC) transactions and understand barriers to and triggers for uptake and use of mobile money.

The Financial Inclusion Report Wave 2 for Pakistan has been released by InterMedia USA .The fieldwork for the study in Pakistan was conducted by Gallup Pakistan (Pakistan’s foremost Social Science Research Lab). The study had its basis in a nationally representative sample of 6000 Pakistani individuals aged 15+ and involved face to face interviews, in terms of methodology. Its purpose was to track trends and market developments in DFS based on the information gathered in the first survey, conducted from November 2013 to January 2014. . Data was gathered in a number of areas: basic demographics, measurement of poverty, financial and technical literacy and mobile phone usage in addition to the information collected on the access and use of formal and informal financial institutions and services. Refer to the Miscellaneous and Notices Section under Publications and Studies, to read the full report.

38. Preconditions for Financial Inclusion: Significant proportion of Pakistanis meet the necessary criteria to use digital financial services in Pakistan; 95% each have the necessary ID and numeracy skills, 77% have mobile phone access; financial literacy however is under 20%.

According to the Financial Inclusion Insights (FII) Survey by InterMedia (a global research and consultancy firm), fieldwork conducted by Gallup Pakistan, significant proportion of Pakistanis meet the necessary criteria to use digital financial services in Pakistan; 95% each have the necessary ID and numeracy skills, 77% have mobile phone access; financial literacy however is under 20%.

Resources (having the necessary ID card, mobile phone access, sim card ownership and geographical access) and knowledge and skills (mobile money awareness, financial literacy, numeracy and ability to send or receive a text) are some of the preconditions to financial inclusion. This press release gives an overview of these preconditions, explains the financial landscape and helps identify the barriers to financial inclusion in the country.

The principle purpose of this Cyberletter is to inform its readers of the latest developments in the financial industry of Pakistan, particularly in the realms of Financial Inclusion and Digital Financial Services (DFS), where efforts are being undertaken by both private and government sectors.

The first issue of FinDev titled Women and Financial Inclusion in Pakistan explores the globally prevalent problem of financial exclusion of women within the Pakistani context. Easy and reliable access to financial services for all segments of society is imperative to the economic development of any country. It is encouraging to see that this issue is increasingly being recognized and that many efforts have been, and are being made, to financially include all segments of the society in the country.

The principle purpose of this Cyberletter is to inform its readers of the latest developments in the financial industry of Pakistan, particularly in the realms of Financial Inclusion and Digital Financial Services (DFS), where efforts are being undertaken by both private and government sectors.

The second issue of FinDev explores the growing phenomenon of Digitization of financial services in Pakistan. According to a Gallup International study, nearly 6 in 10 banking customers (56%) prefer more of a digital than a personal relationship with their bank. Previously ATMs were providing users the digital experience by catering to the banking needing of walking customers . However, the financial sector has realized the increasingly critical role of mobile devices in daily life. It is now fully embracing the digital evolution and taking advantage of this resource by introducing feature such as the mobile wallet.

The principal purpose of this Cyberletter is to inform its readers of the latest developments in the financial industry of Pakistan, particularly in the realms of Financial Inclusion and Digital Financial Services (DFS), where efforts are being undertaken by both private and government sectors.

The third issue of FinDev explores the phenomenon of Expansion of Digital Payments Systems.

JS Bank and Wemsol Pvt Ltd have collaborated for a strategic partnership for Keenu NetConnect to promote e-commerce in the industry by digitizing payments.

Collection of government taxes: SBP, FBR and 1-Link enter deal

The State Bank of Pakistan (SBP), the Federal Board of Revenue (FBR) and 1-Link have signed an agreement to develop a mechanism to facilitate the public in paying their FBR taxes and customs duty using internet banking and ATMs.

Amazon’s Cashier-less store is almost ready for Prime Time

Amazon is introducing high-tech grocery stores where consumers would be able to walk in pick up items and then pay for them through their Amazon accounts, avoiding standing in line at a cashier.

Centre pushes for cash-free campuses

The Ministry of HRD India is pushing to switch all financial transactions to digital payments in the premises of higher education institutions across the country.

Welcome to Gallup Pakistan’s 4th edition of a monthly series -The FinDev Cyberletter. The principal purpose of this Cyberletter is to inform its readers of the latest developments in the financial industry of Pakistan, particularly in the realms of Financial Inclusion and Digital Financial Services (DFS), where efforts are being undertaken by both private and government sectors. Each issue of the FinDev Cyberletter will focus on a particular theme within the broader area of financial inclusion and related topics.

The fourth issue of FinDev explores the phenomenon of Advancements in Digital Payments Systems.

47. Pakistan achieved substantial gains in financial inclusion; the percentage of financially included citizens increased from 9% of all adults in 2016 to 14% in 2017. (InterMedia/ Gallup Pakistan)

According to the Financial Inclusion Insights (FII) Survey conducted in Pakistan by InterMedia USA (www.finclusion.org), with fieldwork conducted by Gallup Pakistan, Pakistan achieved substantial gains in financial inclusion in 2017. The percentage of financially included citizens increased from 9% of all adults in 2016 to 14% in 2017, the first statistically significant change that the FII program has recorded during five years of annual surveys in the country. These results indicate that Pakistani citizens are making tangible progress along the customer’s journey towards greater financial inclusion. Bilal Gilani, Executive Director at Gallup Pakistan, says, “This is great progress with respect to year on year progress, and it testifies that the National Financial Inclusion Strategy is finally beginning to bear fruit.”

A study conducted by Karandaaz analyzes the preference of beneficiaries of the Benazir Income Support Program for BVS based cash withdrawal.

Indiaeyessingleregulatorfore-commercesector:document India is considering a single regulator and legislation to address all e-commerce-related issues in the country, in a bid to remove the legal fragmentation currently governing the sector.

HumanBankersAreLosingtoRobotsasNordeaSetsaNewStandard

As per the CEO of another prominent Nordic bank, “whatever can be automated will be automated.”

Privatebankclaimsopeningfirstaccountontransgenderperson‘sCNIC

Manzoor, the transgender person in question, further said that she will urge other community members to follow suit and open an account, so they can keep their earnings safe.

Pakistan’s e-commerce market almost doubled in fiscal year 2017-18 as digitalisation paved the way for the services sector to increase its contribution to the gross domestic product (GDP)

Pakistan Enigma: Why Is Financial Inclusion Happening So Slowly?

2017 Global Findex revealed only modest growth in financial inclusion since 2014, with 21 percent of adults having accounts.

China’s ‘Belt and Road’, e-commerce to redefine shipping lines

The face of global shipping may be altered and seaborne trade flows and patterns redefined in the wake of new factors such as digitalisation, e-commerce and the China’s ‘Belt and Road’ initiative which are increasingly unfolding.

SBP to Regulate Fintech, E-Money & EMIs

In order to achieve financial inclusion through different services, State Bank of Pakistan has planned to regulate fintech and companies dealing with electronic money or Electronic Money Institutions (EMIs) throughout the country.

About

GALLUPPAKISTAN

Gallup Pakistan, the Pakistani affiliate of Gallup International, is a leading survey research agency and an emerging Social Science Research Lab in Pakistan. Gallup Pakistan is a specialist in independent third party evaluation and ratings.

DISCLAIMER

Gallup Pakistan is not related to Gallup Inc. headquartered in Washington D.C. USA. We require that our surveys be credited fully as Gallup Pakistan (not Gallup or Gallup Poll). We disclaim any responsibility for surveys pertaining to Pakistani public opinion except those carried out by Gallup Pakistan, the Pakistani affiliate of Gallup International Association. For details on Gallup International Association see website: www.gallup-international.com